Gold continues to glitter; prices surge 3% to hit record high on US-China trade war

US gold futures rose 3.2% to settle at $3,177.5.

On the contrary, the US dollar slipped. According to a Reuters report, it hit a 10-year low against the Swiss franc.

The gold rate in the market and its relation to the US dollar are inversely proportional. If there is a rise in the value of the US dollar, the value decreases, and vice versa.

The White House has confirmed that total tariffs imposed on Chinese goods under Donald Trump's trade policy now stand at 145%, from the 125% rate it imposed a day before.

There has been a dramatic set of events in the past 24-48 hours.

On Wednesday, US President Donald Trump announced a 90-day pause on the so-called 'reciprocal tariffs' on all countries except China.

In a post on Truth Social, the president said he had authorised “a 90-day PAUSE” in which countries would face “a substantially lowered reciprocal tariff” of 10%. As a result, nearly every US trading partner now faces a 10% blanket tariff on top of the 25% tariffs that Trump has imposed on cars, steel, and aluminium.

However, Trump said he was raising the tariffs imposed on imports from China to 125% “effective immediately” due to the “lack of respect that China has shown to the world’s markets”.

Later, the rate increased to 145%.

"Gold regains its safe-haven appeal and gets back on track for new all-time highs," Reuters reported, quoting Nikos Tzabouras, Senior Market Analyst at Tradu.com, as saying.

"However, prospects of deals with trading partners pose a significant risk to gold's upside potential, as they could renew pressure on the metal. Additionally, headwinds may arise from pared-back Fed rate cut bets that can strengthen the dollar," the analyst added.